Iceland Accommodations

I have always been a fan of couchsurfing.  There is something about meeting the locals and seeing a place through their eyes that makes it warm my heart that much more.  Everyone has something about their city that makes them stay, whether it's the weather, the food, the sights or the people. It is always more interesting to see that, than to wander history museums and go on guided tours in large groups. 
This time around, I decided to try the middle man between couchsurfing and hostels, airbnb.  I did this because I thought I would feel safer and a little more certain of what I was signing up for, but could still get a little bit of that local culture. Although it was indeed a good middle ground, my next trip will have a bit more couch.
Our place in Reykjavik was located a 20 minute walk along the sea front from downtown, and was a quite pleasant stumble home at 4 a.m.  The room was tiny, it had two single beds and about a 3 foot walking space between the two beds. It was what locals called "A typical Icelandic home." It was small and everything always felt slightly damp.
There was one bathroom under construction and another shared amongst the 6 rooms in the house. The tap water is super fresh and you never run out of hot water, because it is all heated by the sulphur springs.  This was great news except for the slightly eggy smell that clung to everything. We also had access to free laundry during our stay, which is always a bonus when staying somewhere that is constantly rainy.
Our hostess was Olga, she was probably late 20's early 30's and was born and raised in Russia.  She had come to Iceland on a trip 8 years earlier and had decided to stay.  She was drawn to the openness of the Icelandic people and the safe feeling you get when you are in a country made up of only 325 000 people.
In the beginning, she was a bit awkward and hard to talk to, but near the end she warmed up and grew on us.  She took us out to experience the nightlife (stay tuned for that post) and sat up and had tea with us.  Overall, we had a great stay with her. 
For our last 3.5 days, we rented a car, a little Volkswagen Polo and drove around Iceland taking in the sights.  To sleep we curled up with a fitted sheet we stole from a local hotel, our Ikea pillows and tiny blankets and slept in parking lots when we felt like we couldn't drive any further.  This, although a little trying, was not as uncomfortable as it sounds.